Candlestick analysis of the EUR/GBP for 17/11/2010

On a daily graph the EUR/GBP pair is consolidating near the Fibonacci correction level 61.8. However, the viewpoint is bearish, as the downside trend is maintaining. The decline to the support level of 0.82 is expected if the mark of 0.8462 is broken through.

Earlier at daily chart the EUR/GBP has formed the combination of candlesticks Bearish Engulfing, which indicates the signal for the downwards motion.
This combination of candlesticks shows that the currency pair was demonstrating the uprising movement during a couple of weeks after it failed to break out the support level of 0.8067. Having come closer to 0.8950, the pair reversed. This means that the bears activated here and did not allow the bulls to solidify.
The breakthrough of the Fibonacci correction level 38.2 and support level of 0.8626 denotes that this point of view is correct.
It is recommended to set the stop orders slightly above 0.8821, as the breakout of this mark will target the EUR/GBP to 0.8950.

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